Tax season can feel like hunting season —some of us are bringing home big game, and some of us are running for our lives! Either way, you can always bolster your plan to tack on added deductions and reduce your necessary payments. Before anything else, it may be time to tweak your W-4.

Consider whether you had a surprisingly high bill this year or q huge tax credit, because adjusting the amount your employer withholds can mean more spending money during the year and less jump scares come tax season. From there, you can also use these strategies to further reduce your taxable income, and pay less once the season starts.

Invest in an IRA or Roth IRA

IRA stands for Individual Retirement Account and is a fantastic option if your workplace doesn’t offer a 401k plan. IRAs and Roth IRAs each offer tax incentivized saving plans, but the maximum amount you can contribute for 2020 is $6,000. The major difference between the two is that money stored in a traditional IRA will grow tax-deferred, whereas money in your Roth IRA will grow tax-free.

Many people who are looking for an immediate gain on their taxes will contribute to an IRA because the contribution is tax-deductible. For example, if you invest $6,000 of your $70,000 total income into a traditional IRA your taxable income for that year will be $64,000. This allows you to bypass taxes on your investment, and file the money as a deduction.

 Conversely, your contributions to a Roth IRA do not qualify as deductions, but can eventually be withdrawn with no tax penalty. Money saved in either type of account will change over time because the funds must operate like mutual funds, stocks, bonds, or exchange-traded funds.

Use an Employer-Matched Retirement Plan

A 401(k) or 403(b) plan allows you to divert money from your paycheck into savings before it becomes taxable income. In many cases, companies that offer these plans also offer to match a percentage of your savings, allowing you to funnel extra money into your retirement account. For example, if you choose to save $400 from your $5,000 check every other week, and your employer matches 25% of your contribution, that means you can save $500 bimonthly, and your taxable income comes down to only $4,600. Keep in mind that the maximum amount you can save in 2020 is $19,500 as well as an additional $6,500 if you’re 50 or older.

Watch Your Flexible Spending Account

Some employers offer health flexible spending accounts as a part of their benefits package which you can use for out-of-pocket health expenses. The money in this account is deposited tax-free, and can thus reduce your taxable income by up to $2,750 for 2020. As tax season approaches, make sure to max out this spending money.

Your employer can also divert up to $5,000 to a Dependent Care FSA. This money bypasses taxes in the same way as a health FSA but can be used on child care, preschool, and day camps for your children.

Contribute to a Health Savings Account

HSAs work like other investment accounts, allowing you to move money from your paycheck into your account before it is taxed. This money can then eventually be used to cover future health expenses, but to qualify in 2020 you will need a health insurance plan with a deductible of at least $1,400 for individual care or $2,800 for family coverage.

Individuals can contribute up to $3,550 in tax-deductible savings, whereas families can contribute up to $7,100 in 2020. This money can also be withdrawn tax-free as long as it is used on approved expenses, but be careful to monitor your plan going forward. Every year the maximum contribution and minimum deductible to apply are reviewed, so you may have to adjust your savings method.

Make a Donation

Forget giving away old computers or clothing to Goodwill, you can also donate appreciated stocks or mutual fund shares. This is great because your charitable contribution will be the total market value of your investment the day you donate it —not just the amount you initially paid for the asset. This allows you to avoid any taxes that would have been applied if you’d withdrawn your profits, and take the total amount as a deduction.

Besides, you can also deduct losses on your stock sales from any taxable gains you may have. However be careful to watch your losses, because the limit on this offset is $3,000.

Go Back to School — or Save for Your Kids to

Your employer can offer you up to $5,250 of tax-free educational assistance per year. This money can be used towards your tuition regardless of whether the field you’re studying aligns with your current job, and won’t show up on your W-2. In addition, you may also qualify for a Lifetime Learning Credit which can be redeemed for 20% of up to $10,000. That amount can mean a deductible of up to $2,000.

If you’re looking to save for your dependent’s education, you may consider a 529 plan. The assets in these state and federally run plans grow tax-free and can be used on either college or private k-12 education expenses. While you can’t deduct these investments on your federal tax return, you may be able to deduct them on your state return if you choose to invest in your state’s 529 plan.

Just as tax season rolls around at the same time every year, so does our ability to plan for it. One of the best tax decisions you can make is to simply plan your investments in December around how much you’ve spent already. If you can afford to, make sure to max out the money in your FSAs and invest whatever you can into your retirement funds. These last-minute decisions come from a year of budgeting and tracking your expenses, and will save you all the more heartache when it’s time to file.

To open one of these products, talk to ISU Credit Union about your options for saving, donating, and using an HSA or retirement plan.